Voluntary Nature of IPR Proceedings Forecloses Attorney’s Fees, According to District Court
by Megan R. Mahoney, Jason Weil & Rubén H. Muñoz
Jun. 14, 2022
District Court, Inter Partes Review, 35 U.S.C. § 285
A district court recently denied a motion for attorney’s fees under 35 U.S.C. § 285 where the defendant successfully invalidated each claim of the patent at issue during an inter partes review proceeding. The district court explained that, because the IPR was voluntarily initiated by the accused infringer, work completed during an IPR is not a patent infringement “case” for § 285 purposes.
In that case, the plaintiff sued the defendant for patent infringement based on defendant’s “automatic top-off” food fryers. The next month defendant presented plaintiff with several pieces of prior art that allegedly invalidated the claims. Defendant later filed an IPR petition alleging that each claim of the patent was anticipated by one of the references the defendant had previously identified. The board ultimately found all claims anticipated over that reference.
The district court dismissed the case and the defendant timely moved for attorney’s fees under § 285. According to the defendant, the plaintiff pursued frivolous litigation, including taking inconsistent positions before the court and the board, and proceeding with the litigation despite being presented with the invalidating art.
The plaintiff opposed the motion, arguing that Federal Circuit dicta and the statute’s silence on the matter show that attorney’s fees are not available for work in an IPR. The defendant countered, relying on a Federal Circuit case that addressed a unique situation in a reissue proceeding, and arguing that since the dispute was fully resolved through IPR, the IPR proceeding should be considered part of the patent infringement “case” for § 285 purposes.
The district court ultimately agreed with the plaintiff that § 285 attorney fees are not available for IPR proceedings. The court relied on both the words and context of the statute, as well as the Federal Circuit dicta that fees cannot be awarded for work completed during an IPR. IPR proceedings are voluntary, and the alleged infringer chooses to participate in the proceeding by filing a petition. As such, an alleged infringer is not entitled to receive attorney’s fees under § 285 for prevailing in an IPR proceeding.
Practice Tip: When seeking attorney’s fees, parties should consider focusing on an adversary’s conduct during litigation. Conduct during an inter partes review, even if it involves success based on a reference that has been presented to the patent owner, may not support a fee award because proceeding down the IPR route may be viewed as a voluntary choice outside of district court litigation.
Sherwood Sensing Solutions LLC v. Henny Penny Corp., 3:19-cv-00366 (S.D. Ohio May 20, 2022).
System Prior Art Allowed at Trial Despite Arguments That Related Printed Publications Could Have Been Asserted in Parallel IPR Proceedings
by Hannah D. Price, Caitlin E. Olwell & Rubén H. Muñoz
Jun. 14, 2022
Eastern District of Texas, Inter Partes Review, Patent Infringement.
In a recent order, the Eastern District of Texas declined to preclude a defendant from raising prior art system references despite patentee’s argument that similar printed publications could have been raised in earlier inter partes review (IPR) petitions.
After plaintiff United Services Automobile Association (USAA) sued defendant PNC Bank N.A. for patent infringement, PNC filed IPR petitions against each of the six patents-in-suit, of which three were instituted by the Patent Trial and Appeal Board. In each of these petitions, PNC stipulated that “if this IPR is instituted, it will not advance the grounds that are raised or reasonably could have been raised in this IPR in the co-pending district court proceeding.”
In the parallel district court proceeding, PNC asserted prior art system references, which were related to printed publications describing the system. In response, USAA filed a motion in limine to preclude PNC from asserting these system references on the basis that the related printed publications could have been raised in the IPR proceedings.
The court pointed out that district courts are split on the issue of whether a party is estopped from asserting a system reference when there is a related printed publication. The court, however, declined to preclude PNC from raising invalidity defenses based on these system references because it was “not clear on th[e] record that the related publications fully describe[d] all relevant features of the asserted systems.”
Practice Tip: Though prior art systems cannot be raised during IPR proceedings, some district courts have struggled with the issue of whether a party should be precluded from asserting a system reference when there is a related printed publication that could have been raised in IPR proceedings. Parties to litigation should recognize that estoppel may not preclude the assertion of system references, especially if the accused infringer can show that the system has features not disclosed in related prior art publications.
United Services Automobile Association v. PNC Bank, NA, No. 2-20-cv-00319 (E.D. Tex. Apr. 28, 2022) (Roy S. Payne).